Pakistan gets second tranche of IMF loan

KARACHI - Pakistan has received US$554 million dollars as a second tranche of its US$6.7 billion bailout loan from the International Monetary Fund (IMF), an official said Tuesday.

The Washington-based lender approved the extended fund facility (EFF) in September to help the struggling nuclear-armed country achieve economic reforms, particularly in its troubled energy sector.

The IMF made an initial payment of US$540 million, and in November fund officials said during a monitoring visit that Pakistan was "broadly on track" with reforms.

"Pakistan received the second tranche from IMF under the ongoing EFF on December 23," a spokesman for the State Bank of Pakistan (central bank) said in a statement.

The release of the instalment will also bolster the bank's declining foreign exchange reserves.

Cash-strapped Pakistan, plagued by a bloody homegrown Taliban insurgency, is battling to get its shaky economy back on track and solve a chronic energy crisis that cripples industry.

Announcing the approval of the funds on Thursday, the IMF's deputy managing director and acting chair Nemat Shafik warned that Pakistan must continue its reforms for the economy to recover, in particular to improve tax collection.